7-Eleven Skirts Massachusetts Contractor Law in Franchisee Suit

7-Eleven Inc. dodged a proposed class action brought by franchisees who alleged they were misclassified as independent contractors, after a Massachusetts federal judge ruled Thursday that FTC’s franchise rule precludes application of the state’s worker classification law.

The Federal Trade Commission rule mandates that a franchisor exercise a significant degree of control over its franchisees’ method of operation. Meanwhile, the state’s Independent Contractor Law requires businesses to classify workers as employees unless they’re free from control and direction while performing their work.

This creates an inherent conflict, as it’s impossible for an FTC-regulated franchisor like 7-Eleven to comply with both ...